The Financial Brand interviewed four fintech luminaries on the future of digital banking disruption, startup challenges and opportunities, and perspectives on what it will take to transform financial services in 2018 and beyond.

To get an idea of what it’s like to be a fintech start-up in a legacy banking world, we sat down Trisha Price, executive vice president of product development and engineering at nCino; Ben Morales, the CEO of QCash Financial; Louise Steller, vice president of Product Strategy at Ensenta; and Fran Duggan, CEO of Payrailz. We wanted to get an ‘insider’s perspective’ on how a fintech moves from an embryonic stage to a working business model in a highly established, and regulated industry.

Tell us a little about your company.

Trisha Price

Trisha Price (nCino): Our vision is to be the global leader in cloud banking. Our product is a bank operating system that helps to digitize and streamline processes across the bank. Our solution helps to eliminate the internal silos from relationship management, to underwriting, to loan-ops, closing, to executing the closing documents. We get everybody in the bank on one operating system, which helps banks better digitally engage or engage through face-to-face communication, whether in a branch, online or at somebody’s business site. The result is an improved customer engagement and to be able to focus on it and give the customers the delightful experience that they’re looking for.

Ben Morales

Ben Morales (QCash Financial): We are a fintech company that’s developing solutions to help financial institutions create more financially inclusive products. The market we’re disrupting is the predatory lending space, delivering small-dollar lending. Our lead product is a white label digital small-dollar lending platform that removes the cost – leveraging automation and technology to originate, underwrite and fund a small-dollar loan in six clicks and 60 seconds, through any delivery channel. Our ‘secret sauce’ is how we’ve been able to apply the data analytics, and not require a credit report.

Louise Steller

Louise Steller (Ensenta): We are a cloud-based solution provider based out of Silicon Valley, focused on mobile and online payments and deposits. We service over 1,100 financial institutions as well as the U.S. government. Our product strategy has always been a focus on balancing the customer experience together with risk management and back office efficiencies. To do that, we use open APIs to allow financial institutions to tap into the best-of-breed solutions. We are taking mobile deposits from being sort of the ‘MVP’ offering (minimum viable product), to a mobile payment and mobile deposit solution that builds on trust and drives brand loyalty for our customers.

Fran Duggan

Fran Duggan (Payrailz): We are a digital payments company that offers advance payment capabilities to banks and credit unions, creating a smarter, more engaging customer experience. The way we approach this is building from the ground up, looking more into the future leveraging the technology of today. We’re a 100% cloud-based, 100% API-based service. It’s that smarter, more engaging experience that we’re focused on, since we think the world is changing into a “do it for me” culture. We expect our computers and devices to do more stuff for us, whether it’s that Nest program or whatever. We’re applying that type of logic and technology to payments, to really disrupt the payments market.

How do you differentiate your firm from traditional providers?

Trisha Price (nCino): We see our biggest differentiator in that we’re able to connect the front end, the digital front, to the back end. We’re able to elegantly connect the front to the back so that the customer is having a two-way engaging conversation and process. For instance, the consumer will understand when their loan is going to close. They only have to provide documentation one time and that’s shared with every group at the bank. And because we also handle different products, we only ask for pieces of information and documentation one time.

Ben Morales (QCash Financial): We are unique because we’ve been able to develop a relationship-based underwriting engine that is able to pull the experience the consumer has had with their financial institution, put it in the bank’s decision engine, and be able to make a quick decision without a credit report. We have data from over 10 years that proves the validity and ability to manage risk that way. Our solution also pulls costs out of delivering small dollar loans.

Louise Steller (Ensenta): One of the things that we’ve done to really differentiate our solution is to build APIs that allow us to tie into third party notification systems and enable communication through in-app notifications, such as SMS. We let the customer know what the status of their mobile deposit transaction is, such as when they can get access to funds. We also allow financial institutions to provide their small business customers with solutions for depositing multiple checks using just their phone instead of a scanner to deposit, for instance, 10 checks at a time.

Fran Duggan (Payrailz): We leverage artificial intelligence (AI) and the existing data banks have to do processes for the clients – adding value for the client. The easiest case is making your bill payments for you. So, we’re leveraging technology that the current providers simply haven’t innovated in God knows how long ago, where the world is headed, which is to “do it for me.” So, we’re going to do your payments for you, and take away the pain of paying bills.

What has been the biggest challenge you faced bringing your solution to market?

Trisha Price (nCino): The biggest challenge for us is the amount of effort it takes for banks as they go through a major bank transformation or change process. While our software is very easy to configure and can be integrated very quickly, when a bank is going through a transformation, whether that’s opening a digital channel, or taking credit policies and standardizing them across different groups, it’s something that requires a lot of time and effort from our customers.

Ben Morales (QCash Financial): The biggest challenge may be “how do we avoid using past solutions to solve future problems?” So, when we designed our solution, we really didn’t pull in any lenders. We didn’t want their perspective, because we knew we had to innovate something that wasn’t in the marketplace, and so we had to set ourselves up for success and just say “let’s not create any barriers or boundaries on how we want to deliver this.” We just had to understand the market need, and what was being delivered out there today, and make sure whatever we did surpassed that.

Louise Steller (Ensenta): We are a cloud solution provider, and that was somewhat challenging at the beginning – working with FIs that were not necessarily comfortable with the cloud. From the early stages, we decided to take on security and have been PCI certified for seven years. I think the industry has seen a shift, where financial institutions are now recognizing the benefits in working with cloud providers.

Fran Duggan (Payrailz): The biggest challenge is what we refer to as the “buggy whip issue.” You’re familiar with the old famous business case where, “we can build the buggy whip! But, unfortunately, everyone is driving cars?” It’s hard to have people break internally, as well as externally, the trained thought processes that current providers have ingrained in our banking environment. We need to approach it from the end user’s perspective.

How does the marketplace look in 2018 for fintech providers?

Trisha Price (nCino): I really think this is an evolution, not a revolution. I think if you look in leaps and bounds from a decade ago to today, and what the cloud and extreme computing power has allowed all of us to do, it’s changed dramatically. It’s going to keep going, with things like machine learning and AI, and all of us are starting to put those tools into our tool belt as another way to solve problems. You’re going to continue to see innovation, and you’re going to continue to see banks accept that innovation. As we have seen, once one does something, others have to also, to compete. I think you’re going to continue to see tet evolution that we have been seeing over the last 20 years, continue in 2018 and beyond.

Ben Morales (QCash Financial): I think we’ll be seeing a lot of the same in a way. There will be a lot of testing and learning going on, and 2018 is when we’re going to really see some new, innovative things hit the market that have been “proven,” I think for QCash Financial, we are looking at the opportunity to continue to deliver on our objective of creating more financial inclusive products for financial institutions. I also think there’s going to be a closer collaboration between financial institutions and fintech firms in the future.

Louise Steller (Ensenta): So, if I look back into 2017, I think the big topics and big trends were real-time payments and new innovations with some of the non-traditional fintech providers. We think that real-time payment and funds availability are going to continue to be a big focus for 2018. We do focus on check deposits, that still today are a very prevalent and important payment method for businesses. So that’s an area we’re looking to be able to accelerate funds availability as part of our 2018 strategy.

Fran Duggan (Payrailz): I think my easiest answer is probably ditto, ditto and ditto. I think the other panelists said it very well. The one thing I guess I would add would be that the biggest shift will be people moving from ‘thinking about things’, to ‘taking action’. We’re getting a lot of calls and requests from people who seem to be ready to do something about new innovations, as opposed to talking about a lot of those things that the other folks are mentioning. I think you’ll see in 2018, more of a sense of action.

What is the singular trend or prediction you see in 2018?

Trisha Price (nCino): The biggest trend that I see happening next year is adoption around digital engagements from banks, and the use of analytics and data driven approaches to make that connection. I see FIs adopting analytics to continue to make efficiencies even greater, and knowing their customer even better, being able to predict life events, and being able to drive products based on individuals, not based on sort of legacy products as they’ve been organized in the past.

Ben Morales (QCash Financial): We see that as 2018 evolves, the benefits of leveraging data, data analytics, artificial intelligence and remote process automation as a big overarching trend. So, I think the big payoff for 2018 is going to be actually getting some good consumer value from the data analytics work that has been done in the recent past.

Louise Steller (Ensenta): I think there’s going to continue to be the big focus on real-time payments and providing the right technologies that are going to allow financial institutions to do this in a smart and compelling way. I also see providing API technology to help the industry move faster as an important in 2018.

Fran Duggan (Payrailz): I think you’re going to start seeing some really powerful engaging digital experiences being offered that finally leverage the data and the technology that we’ve all been working on.

Jim Marous is co-publisher of The Financial Brand and publisher of the Digital Banking Report, a subscription-based publication that provides deep insights into the digitization of banking, with over 150 reports in the digital archive available to subscribers. You can follow Jim on Twitter and LinkedIn, or visit his professional website.